Manitoba small business owners uncertain how to deal with loss of duty-free exemption
Leiah Bauer intends to disallow U.S. orders on Apothecandy's website beginning Aug. 18. She's sold her company's goat milk soap to American clients for the past 15 years.
'Those customers are loyal and wonderful customers,' Bauer said Friday. 'It's sad to tell them that I can't ship them some of their favourite products.'
She hasn't needed to consider duties in the past. Canadian exports under US$800 crossed the border duty free through legislation called the de minimis exemption.
U.S. President Donald Trump issued an executive order last month to suspend the global exemption; the pause begins Aug. 29.
Bauer joins local entrepreneurs confused by the change.
'Until I have a very clear picture of how this is going to work moving forward… I think the best course is to pause shipping to the United States,' she relayed.
American purchases consume at least 30 per cent of Apothecandy's orders. Bauer doesn't yet have a plan to make up the lost sales: 'This is all happening very fast.'
She announced the decision to customers, she said, after seeing fellow artisans do the same.
Eye and Ear Control Records, a vinyl mail-order company, has also halted U.S. exports. Owner Brad Skibinsky said Friday he's trying to understand the impact of the exemption change.
A percentage fee on his wares would be 'sustainable,' but a flat fee would be 'untenable.'
The U.S. executive order outlines varying new charges. Some goods sent through the postal service will be taxed with their country of origin's tariff rate.
In other cases, fees could range from US$80 to US$200, depending on the tariff rate at the package's country of origin. This option has a six-month timeline.
Overall, charges will differ by customs broker and the nature of work involved, said Alan Dewar, GHY International's executive vice-president.
Most low-cost packages were processed without customs declarations. Now they all will need declarations — and the increase is 'staggering,' Dewar wrote in a text.
The United States saw more than one billion de minimis entries in 2023. The number is a massive jump from the 153 million entries counted in 2015, a January U.S. Congressional Research Service report reads.
In 2016, the U.S. changed its de minimis exemption from US$200 to US$800.
Roughly 16 per cent of the Canadian Federation of Independent Business's 4,500 Manitoba members export to the United States. Most use the de minimis exemption.
'Every small shipment now faces these tariffs or customs paperwork and potential delays at the border,' said Tyler Slobogian, a senior policy analyst with the CFIB.
He's clocked businesses halting marketing campaigns in the United States and looking to sell elsewhere. The CFIB has publicly called on Ottawa to route money collected from its U.S. import tariffs to small businesses affected by the trade war.
Milena Lye, owner of skin care company Just the Goods, anticipates she'll need to increase prices as she continues selling to the United States.
Some customers may leave. However, the weaker Canadian dollar might keep products competitive, Lye said.
'I feel like I'm making skin care products for a community of friends. I don't want to cut them off,' she wrote in an email.
She's prepared to work overtime to help clients 'stock up' ahead of Aug. 29, she continued.
Natassia Bezoplenko-Brazeau is among the business owners shifting focus to other Canadian buyers. Northlore, her Winnipeg-based body care company, has inked new deals with retailers in Saskatoon and Ottawa.
Monday Mornings
The latest local business news and a lookahead to the coming week.
'It seems more worthwhile to turn my attention to,' Bezoplenko-Brazeau said. 'It's already been exhausting trying to keep up with it all.'
She's planning to inform her American customers their products will get more expensive — due to U.S.-imposed measures — via newsletter or website banner. Around 20 to 30 per cent of Northlore's online sales come from Americans, Bezoplenko-Brazeau estimated.
President Trump has cited fentanyl and other drug trafficking as the reason for pausing the de minimis exemption.
He halted the exemption for Chinese and Hong Kong imports in April. The move has affected Manitoba exporters who largely use parts from the two countries in their wares.
gabrielle.piche@winnipegfreepress.com
Gabrielle PichéReporter
Gabrielle Piché reports on business for the Free Press. She interned at the Free Press and worked for its sister outlet, Canstar Community News, before entering the business beat in 2021. Read more about Gabrielle.
Every piece of reporting Gabrielle produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press's tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates.
Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber.
Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
11 minutes ago
Who controls the food supply? Proposed changes to seed reuse reopens debate
It's a small change that risks cultivating a big debate. On one side is the principle of farmer's privilege — the traditional right of Canadian farmers to save seeds at the end of a growing season and reuse them the next year. On the other is the principle of plant breeders' rights — the right of those who develop new seeds and plants to protect and profit from their discoveries. The issue has been dormant for a decade. Now, proposed changes to government rules regarding plant breeders' rights are reviving that debate. It also raises questions about how Canada gets its food and who controls what is grown. Ultimately, it's about food security, said Keith Currie, president of the Canadian Federation of Agriculture. The group supports the changes, which include narrowing the scope of farmer's privilege. Not only keeping us competitive to keep food costs down, but also to make sure that we maintain new varieties coming forward for that food availability. Enlarge image (new window) The proposed changes could reduce the right of farmers to save and reuse seeds for crops like fruits and vegetables. Photo: The Canadian Press / Giordano Ciampini In a notice (new window) dated Aug. 9, the government announced proposed changes to Canada's Plant Breeders' Rights Regulations — a form of intellectual property protection for plants, similar to a patent. The regulations give plant breeders a monopoly over the distribution of their product for a set period, as a way to to encourage investment and innovations such as varieties with higher yields or more resistant to drought or pests. It's a big business. Estimates of the economic impact of the seed industry in Canada range from $4 billion to $6 billion a year. The right to reuse The changes would remove the right of farmers to save and reuse seeds and cuttings from protected fruits, vegetables, ornamental varieties, other plants reproduced through vegetative propagation and hybrids. For most plants recognized under the law, the protections last for 20 years. Personal gardens and many other kinds of crops such as wheat, cereals and pulses, where seed saving is more widespread, would not be affected. Among the other proposed changes is to extend the protection for new varieties of mushrooms, asparagus and woody plants like raspberries and blueberries to 25 years from the current 20 years. A public consultation on the changes runs until Oct. 18. Enlarge image (new window) NDP agriculture critic Gord Johns is calling for parliamentary hearings into the proposed changes. Photo: Kendal Hanson/CHEK News NDP agriculture critic Gord Johns says the changes raise an important issue for Canadians. He questions why the government is holding the consultation in summer when most farmers are focused on growing and harvesting crops — not drafting submissions for public consultations. They keep doing this over and over again, said Johns of the federal government. They announce regulatory changes that impact farmers and their livelihoods [and] they schedule the consultation period during the busiest time of the year for farmers. Johns said companies producing new kinds of seed should be adequately compensated for their innovation and intellectual property. But he said farmers who grow and harvest the food Canadians eat shouldn't be starved by big corporations choking off their seed supply. He wants the House of Commons agriculture committee to hold hearings and take a closer look at the changes being proposed. A spokesperson for Minister of Agriculture and Agri-Food Heath MacDonald said the government is committed to encouraging innovation, investment, research and competitiveness in Canadian agriculture, horticulture and ornamental industries. The spokesperson said the government will review all feedback before determining next steps. Access vs. innovation Former prime minister Stephen Harper's government triggered a debate in 2015 when it adopted measures to bring Canada's rules more in line with guidelines adopted by the International Union for the Protection of New Varieties of Plants, known as UPOV 91. The rules are separate from patent law or technology use agreements which some seed companies use to prevent farmers from saving and reusing seeds. Changes to plant breeders' rules are now again on the table. Last year, a government consultation resulted in 109 submissions, the majority supportive of change. Meanwhile, lobbyists have been busy behind the scenes. According to the federal lobbying registry, 13 people from several different groups or companies are currently registered to lobby on plant breeders' rights including the Canadian Federation of Agriculture, the Canadian Canola Growers Association, the Fruit and Vegetable Growers Association and Swiss-based Syngenta, owned by Sinochem, a Chinese state-owned enterprise. Enlarge image (new window) Wheat is not included in the proposed changes, but a research director for the National Farmers Union worries they could be the start of a 'slippery slope.' Photo: Reuters / Todd Korol Cathy Holtslander, director of research and policy for the National Farmers Union, says the proposed changes risk hurting farmers while increasing profits and the power of seed-producing companies — often multinationals with foreign ownership. While the changes are focused on an area of agriculture where seed saving is less common, Holtslander warns the changes are a slippery slope that could lead to an erosion of the rights of farmers. If they were to go after wheat with the amendment, there would be a huge uproar and people would really be angry and push back, Holtslander said. She said what's being proposed paves the way for other crops to be included later. The seed industry does not want farmers' privilege to exist for any seed. They want to be able to require people to buy new seed every year, she said. Holtslander's group plans to fight the proposed changes. She said the issue goes beyond the question of individual farmers reusing seed. If the big multinational companies control the seed, they control our food supply, she said. Lauren Comin, director of policy for Seeds Canada, acknowledges the issue can be controversial but argues Canada needs strong intellectual property protection if it wants access to the newest innovations to compete on the world stage. It's incredibly important to have these frameworks to encourage investment companies, businesses, public entities, to know that they are going to somehow be compensated and protected, Comin said. She said that while the changes provide that certainty and that incentive for investment, she wants them to go further. While acknowledging there isn't enough certified seed for all of Canada's cereals and small grains crop, Comin would also like to see farmers compensate plant breeders when they reuse seeds, as they do in Europe. The farmer's privilege does not say that that use is free, she said. [Farmers] can choose to buy the latest and greatest product of innovation, which means that there is a tremendous amount of investment and effort that went toward developing this improved variety. Or they can decide that they don't value innovation, and they can go back to a variety that's unprotected and grow that. Currie, an Ontario grains and oil seed farmer who saves and reuses seeds, says Canada needs to balance the two principles. He says farmer's privilege is key to Canada's competitiveness, but so is access to new varieties of seeds and plants. While I do understand where some of the multinationals want to have better control, I believe in order for the industry to be viable, farmers have to have some control as well, he said.
Calgary Herald
11 minutes ago
- Calgary Herald
CUPE responds after Labour Board declares Air Canada flight attendant strike illegal: 'If it means...going to jail, then so be it'
Union leadership said it will continue to support flight attendants on picket lines across the country after the Canada Industrial Relations Board declared the ongoing strike by about 10,000 Air Canada flight attendants unlawful and ordered union leadership to direct members to return to work. Article content During a press conference held Monday from Mississauga, Ont., CUPE national president Mark Hancock said the union would not back down. Article content Article content Article content 'We will not turn our back on these workers,' he said. 'We will do whatever it takes to get them a collective agreement (so) that they can vote on it.' Article content Article content Hancock said the union will continue to support flight attendants on picket lines across the country. Article content 'We're going to stay strong,' he said. 'And if it means folks like me going to jail, then so be it. If it means our union being fined, then so be it. Article content 'Our members want a solution here, but that solution has to be found at a bargaining table.' Article content Hancock argued the right to strike is a fundamental right protected under the Canadian charter. 'It is an essential part of collective bargaining and for workers to have a say in their collective future. These rights have to mean something,' he said. 'Real negotiations cannot happen if only one side is banking on the government taking away the rights of another party, and that is what has happened here.' Article content Article content The union remains committed to finding a deal, Hancock said. Article content 'We welcome any assistance that helps us find a way to reach a freely negotiated collective agreement– an agreement that our members can ratify,' he said. 'We will not resolve this by taking away the rights of workers who are already struggling to make ends meet.' Article content The press conference came after the Canadian Industrial Relations Board declared that CUPE's strike is unlawful. Article content In a statement issued Monday, Air Canada said the board had ordered union officials to direct its member to return to work. Article content In its ruling, the board ordered CUPE officials to 'immediately cease all activities that declare or authorize an unlawful strike of its members and to direct the members of the bargaining unit to resume the performance of their duties.' Article content The ruling ordered union officials to provide written notice to all members by 12:00 pm EDT on Monday that all members must resume their duties. Article content Air Canada had planned to resume operations of Air Canada and Air Canada Rouge flights on Sunday after those flights were grounded on Saturday due to the labour disruption, but the airline said it was not able to resume operations due to 'CUPE leadership's unlawful strike activities.' Article content
Edmonton Journal
11 minutes ago
- Edmonton Journal
Opinion: Ordering Air Canada workers back to work erodes the middle class
Article content Why should Canadians care about any of this? Put simply, they should care because the middle class is not a naturally occurring phenomenon. It depends on rules and legal frameworks that give workers bargaining power. And the key to working bargaining power is the right to strike. Without it, corporations and the rich will gobble up ever larger pieces of the economic pie and workers will only be left with crumbs. Article content Defending worker bargaining power is particularly urgent in the context of the current affordability crisis. No political party or government can legitimately say that they're on the side of working people if they don't have a plan to maintain or expand worker bargaining power. If they're doing the reverse — as is the case with Section 107 — then they're part of the problem, not the solution. Article content The fear among Canadian unions and workers is that if the Liberals get away with watering down the right to strike at the federal level (which has legislative responsibility for about 10 per cent of Canadian workplaces) it will only be a matter of time before provincial governments draft their own versions of Section 107 for provincially regulated workplaces. Article content Article content Workers and unions see this as an existential threat to the post-Second World War 'Great Compromise' which saw workers agree to swear off wildcat strikes in exchange for a regulated system of labour relations that promised fair outcomes for both workers and employers. This compromise was instrumental in building the broadly shared prosperity that helped create the Canadian middle class. Article content This is why Air Canada workers are defying the back-to-work order — and why others are promising to follow suit. If the system created by the Great Compromise no longer can be counted on to deliver fair outcomes for workers, why should workers respect it? Article content Federal Jobs Minister Patty Hadju says she's using Section 107 to secure 'labour peace.' The irony is that the continued use of this section in ways it was never intended is bringing about the opposite: the potential collapse of the Great Compromise. As workers from that era famously chanted from their wildcat picket lines: 'No justice, no peace.' Article content Article content If Prime Minister Carney really wants labour peace — and if he doesn't want to go down in history as the prime minister who weakened worker bargaining power at the worst possible time — then he needs to rescind the back-to-work order for Air Canada flight attendants and repeal Section 107. Article content Now is the time to remember and reinforce the Great Compromise, not abandon it. As the old saying goes: those who forget history are doomed to repeat it. For the sake of the Canadian middle class, let's try to avoid that mistake. Article content
